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  1. 1. Trade
  2. 2. What is trade? • No country can provide everything that people need – food – minerals – energy, etc • To provide its inhabitants’ needs, a country has to trade
  3. 3. IN-and-OUT A country buys goods and services that is either short of, or which it can obtain more cheaply from elsewhere the To pay for imports, a country must sell products of which it has a surplus, or which it can produce more cheaply than other countries energy, clothing, technology IMPORTS EXPORTS machinery, cars, chemical prod, food
  4. 4. Surplus or Deficit? • Country A will earn more money from exports than it needs to spend on imports = TRADE SURPLUS • Country B has to spend more on imports than it earns on exports= TRADE DEFICIT • Which of these countries is a MEDC? Why? • Which of these countries is a LEDC? Why?
  5. 5. Patterns of world trade
  6. 6. Patterns of world trade RICH NORTH Share of world export income = 75% 75% of the exports are primary goods POOR SOUTH Share of world export income = 25% 70% of exports are manufactured goods
  7. 7. Vicious circle of trade LEDCs Which keeps the country poor And earn little money Export mainly primary goods That have low value Draw a diagram like the one above for MEDCs
  8. 8. Balance between MEDCs-LEDCs Over a period of time, the trade imbalance between the richer countries of the ‘North’ and the poorer countries of the ‘South has widened.
  9. 9. World trading blocs Many countries have grouped together to form trade blocs to try to improve their trade balance. This is the difference between the cost of their imports and the value of their exports. For example, the European Union
  10. 10. What is trade?……some terms Trade Match these terms to the definitions on your sheet Manufactured goods Primary goods Import Export Trade deficit Trade surplus
  11. 11. Definitions Products which are made from primary goods Buying goods or materials from another country Raw materials such as food and energy Cost of imports is greater than the money obtained from exports The exchange of goods and materials between countries Money from exports is more than money paid for imports Selling goods to another country
  12. 12. Trade in LEDCs Trade in MEDCs Draw a table and put the statements under the correct heading •trade is mostly the export of manufactured goods •good internal transport helps trade •prices of raw materials tend to rise slowly •world recessions hit the trade of these countries •a wide range of goods is traded •prices of farm products like coffee go up and down •the total trade is very large •raw materials are exported for processing •prices of manufactured goods don’t fluctuate as much •poor transport links may hinder trade •the total trade is relatively small often only a few key items •trade is controlled my multinationals whose profits go back to their home country.
  13. 13. Your task • You are going to investigate the trading patterns for ONE country, Kenya or Japan in pairs • Use the table to help you organise your work • After you have completed your investigation you will be expected to tell the class ONE fact about the trade in your country
  14. 14. Homework – write a paragraph to compare the difference between Kenya and Japan’s trade patterns • What are the main imports & exports? • Who are the main trading partners? Is it part of a trade bloc? • Does it have a trade surplus or deficit? • What are the reasons for the pattern of trade?
  15. 15. Kenya’s imports and exports
  16. 16. Who does Kenya trade with?
  17. 17. Is Kenya in a trade surplus or deficit?
  18. 18. Japan’s imports and exports
  19. 19. Who does Japan trade with?
  20. 20. Is Japan in a trade surplus or deficit?
  21. 21. COUNTRY Trade Primary goods Manufactured goods Main trading partners % with MEDCs % with LEDCS Links with any trade blocs Exports Imports
  22. 22. COUNTRY JAPAN Trade Primary goods Manufactured goods Main trading partners % with MEDCs % with LEDCS Links with any trade blocs Exports Imports
  23. 23. COUNTRY KENYA Trade Primary goods Manufactured goods Main trading partners % with MEDCs % with LEDCS Links with any trade blocs Exports Imports